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CPCs Reach All-Time High

Marketers feel the pressure to land their brand's content and search advertisements in the first couple of spots in mobile search queries. The drive to dominate the top of the results page has
sparked a bidding war that continues to drive up the cost per click.

More than 1,800 AdWords accounts managed by iProspect show that CPCs rose 36% year-on-year in second-quarter 2017,
and 13% compared with the previous quarter. The increase is at the highest level since 2014.

In the Quarterly Paid Search Trends Q2 2017 report, iProspect attributes the increase to
competitive pressure in mobile search and Google’s update in May to the Ad Rank calculation, a change that reprioritized keyword bids over other ranking factors such as Quality Score.

iProspect analysts believe the update will result in higher costs for some advertisers this year. "In the past, quality score has played a major role in keeping CPC low for trademark keywords," per
the report. "Because the latest update has reduced the weight of quality score, that factor provides less of a counterbalance."

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Mobile CPCs are still a bit lower than desktop, but they have
been rising steadily since the first quarter of 2016, up 52%.

It's clear from iProspect's numbers that mobile continues to take a greater share of clicks. iProspect notes that among its
clients, 60% of clicks now come from mobile, compared with 32% from desktop and 8% from tablets.

During Alphabet's
second-quarter 2017 earnings call on Monday, company executives noted that mobile contributed "significantly" to revenue growth. The iProspect report also indicates an increase in mobile investments
fueled by advancements in attribution and online-to-offline measurements that allow for a greater degree of accuracy.

Shopping CPC remains lower than search ads at an
aggregate level, and shopping CPCs were 29% lower overall than search in first-quarter 2017.

Data also shows that the click-through rate for Search ads rose 21% YoY, but the CTR for Shopping
Ads declined 16%, mostly due to the launch of new ad formats released during the past year, which display more Shopping units per query and record a higher number of Impressions.

Interesting to read that iProspect is coming out stating 36% higher CPC rates for their accounts on the same day that AdAge is reporting on Google's revenues, specifically calling out "Although cost-per-click was down 23% year-over-year, paid clicks were up in a major way: 52% when compared to the same time last year." Source: http://adage.com/article/digital/brand-safety-holding-google-back/309907/